What is a SIP?
A Systematic Investment Plan (SIP) is a method of investing a fixed amount in a mutual fund at regular intervals — usually monthly. SIPs leverage rupee cost averaging: you buy more units when markets are low and fewer when markets are high, smoothing out the impact of volatility over time. This makes SIPs one of the most accessible wealth-building tools for salaried Indians.
How Does a Step-Up SIP Work?
A step-up SIP (or top-up SIP) increases your monthly investment by a fixed percentage each year. For example, starting at ₹5,000/month with a 10% step-up means ₹5,500 in year 2, ₹6,050 in year 3, and so on. Over 20 years, this can more than double your final corpus compared to a flat SIP — making it one of the most powerful tools to counter salary increments keeping pace with inflation.
SIP vs Lumpsum: Which is Better?
Neither is universally better — it depends on your cash flow. SIP wins during volatile, uncertain markets because rupee cost averaging smooths your entry price. Lumpsum wins during clear market lows, as all your money starts compounding immediately. For most salaried investors, SIP is more practical; for those with a bonus or inheritance, lumpsum during a correction can be very rewarding. Use both modes of this calculator to compare side-by-side.